RBS cuts mortgage rates to lure customers
Royal Bank of Scotland is trimming up to 0.3 percentage points off new mortgages to boost market share, taking advantage of its rivals' retreat in the face of the credit market crisis and a deteriorating housing outlook.
RBS profits up 9 percentRBS, which hopes to maintain current lending volumes for the remainder of 2008, said on Tuesday the move would see all new fixed-rate and tracker mortgages taken out directly with RBS and NatWest reduced by between 0.1 and 0.3 percentage points.
RBS is Britain's sixth-largest mortgage lender behind Northern Rock, with around 6 percent of the market, but it said earlier this month it had grabbed almost double its typical share in the first quarter.
"Whilst 2008 has seen a shrinking mortgage market, we have actually increased the amount we have lent by 18 percent and plan to continue this trend for the rest of the year," said Paul Geddes, chief executive of consumer banking at the group.
The overwhelming majority of lenders have withdrawn thousands of products and raised rates as their funding costs jumped, but RBS is not alone in having spotted an opportunity.
HSBC, which has an underweight position in UK mortgages and surplus funds, said earlier this month it would match homeowners' existing rate deals, targeting some of the 1.4 million customers who come off fixed-rate deals this year.
Alongside its rate cuts, RBS also announced plans for a new account to help first-time buyers save up for a deposit.
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